Publicis Grows 4.1% In Q1 But Expects Slower Q2

CEO: Things Will Pick Up Again in Second Half of the Year

Publicis Groupe expects a "deceleration" of growth in the second quarter, followed by a stronger performance in the second half of the year, Chairman-CEO Maurice Levy told analysts in a conference call today.

"There is a lot pushed back to the third quarter, partly because of the Olympics and also the scheduling of product launches," Mr. Levy said. In particular, he said, Renault is introducing the Clio and its electric car, the Zoe, which he called "the beginning of a new strategy for Renault electric cars."

Publicis announced organic growth of 4.1% in the first quarter, and a 12.9% revenue gain year-over-year, to $1.9 billion.

Mr. Levy, who turned 70 in February and delayed retiring to continue the search for Publicis' next leader, didn't address the succession issue, but it remains one of the company's big questions.

Mature markets held steady. Though held back by Italy and Spain, Europe had revenue growth of 3.6%, to $541 million. The strongest growth in mature European markets was in the U.K. (8.6%), Germany (10.1%), and France (4.6%).

Publicis' North American revenue grew 3.3%, to $951 million. Mr. Levy said the the rise was relatively slow because "lots of clients are pushing their investment around the Olympics." He added that there was a "sharp decrease in analog media at the beginning of the year."

The BRIC markets grew 10%. Publicis is calling the next group of developing markets Missat (Mexico, Indonesia, Singapore, South Africa and Turkey). Revenue growth in those countries reached 11.8%.

Digital revenue rose 15.6% and accounted for 33% of total group sales, vs. 28% in first-quarter 2011.

Publicis is still on the acquisition trail, focusing on small and midsize companies, including Germany's largest independent digital communications agency, Pixelpark, and other shops in France (Mediagong), Russia (The Creative Factory), China (U-Link Business Solutions) and the Middle East (Flip Media).

Earlier this year Publicis bought back 18 million of its shares from Japanese ad giant Dentsu for a total of $850 million, ending an alliance that began in 2002.